Signs of a recession?
- The White House announced that it will sell an additional 26 million barrels of crude oil from th Strategic Petroleum Reserve
- Purpose is to keep gas prices from increasing due to inflation
- Will push the reserve to the lowest level since 1983
- In 2022, 180 million barrels of oil were sold for a total of 260 million in past 2 years
- This new action will result in the reserve holding only 346 million barrels of oil, even though the capacity of the reserve is 713 million barrels
- The federal Department of Labor’s Consumer Price Index shows that inflation was up to 6.4% in the month of January, 2023
- The produce price index rose 0.7%
- Measure of what raw goods fetch on the open market
- Biggest increase since 6/2022
- Vanguard Financial is reporting that a “record number of Americans are making emergency withdrawals from their 401k retirement plans in order to cover a financial emergency”
- 2.8% of workers in the U.S. have applied for a “hardship” withdrawal so far in 2022
- “evidence that some families may be feeling the pinch”
- 39% of Americans increased their contributions to their 401K plans in 2022, but average balances still dropped by 20%, as stocks plunged and inflation hit record highs
- “Recession is likely staying on the sidelines as long as there is a shortage of employees to fill open job positions”; stated James D. Jenks, CEO of Global Finance and Leasing Services
- Brookfield Corp., the largest office landlord in downtown Los Angeles, CA, announced it is defaulting on loans to 2 very large office towers
- Unable to refinance the debt as demand for space has weakened due to economy and work-from-home workers not coming to office
- Two building are; Gas Company Tower ($465 million in loans) and the 777 Tower ($290 million in loans)
- Moody’s Analytics is reporting that 9.3% of auto loans extended to people with low credit scores were 30 or more days behind on payments at the end of last year
- highest share since 2010
- “The households that were on the financial ledge to begin with might have been tipped to thenpoint where it’s hard to keep up on the car loan and everything else, and people have to make some very hard decisions,” said Pamela Foohey, a professor at Cardozo School of Law who studies consumer law.
- Ally Financial Inc., which operates a large auto-lending business, said in January that the loans it extended between mid-2021 and mid-2022 are experiencing bigger early losses than its other loans.
- In the fourth quarter, the percentage of its car loans that were more than 60 days past due rose above prepandemic levels for the first time.
- The number of people losing their cars to repossession rose 11% in 2022 but remains below prepandemic levels, according to estimates by Cox Automotive based on wholesale auctions and default rates.
- Single-family median home prices increased 4% in the fourth quarter from a year ago to $378,700.
- Prices were strongest in the Northeast in the last quarter, up 5.3%; followed by the South, up 4.9%; the Midwest, up 4% and the West, up 2.6%, according to the National Association of Realtors.
- According to a recent survey by the banking firm LendingClub and the payments news website PYMNTS, 64% of U.S. consumers now say they are just getting by.
- That's an increase from 61% the previous year.
- Among the new cohort of people who say they are newly living paycheck to paycheck, 86% pull in more than $100,000 annually, the survey found.
- Given that the median household income in the U.S. is $70,784, the survey shows the soaring cost of living in America is catching up to even more well-off U.S. residents
- “The effects of inflation are eating into every American’s wallet, and as the Fed’s efforts to curb inflation drive up the cost of debt, we are seeing near-record numbers of Americans livingpaycheck to paycheck,” said Anuj Nayar, the financial health officer at LendingClub.
- percentage saying their finances were worse than they were a year ago hit 50%, the highest since the Great Recession
- The Center for Immigration Studies is reporting that end of 2022, 1.9 fewer Americans were working than in 2019
- During same time period, close to 2 million foreign-born workers have been added to the workforce